Bank of England tests distributed ledgers with PwC

The Bank of England and consultancy firm PwC have partnered on a distributed ledger project.

The proof of concept saw PwC’s Emerging & Digital Technologies team work with the Bank of England to provide technical knowledge on supporting the Bank’s own technology team on the distributed ledger technology.

The idea behind the PoC was to explore the potential opportunities and challenges of using the technology for payments settlement.

The two aimed to use it to create a single shared view of transactions that would allow every participant simultaneous access to a shared view of information.

Rob Elsey, CIO, Bank of England, said: "This Proof of Concept brought to life the core features of distributed ledgers, greatly enhancing the Bank’s understanding of DLT. With PwC’s support, the Bank’s developers used the latest techniques and software to deliver this POC and have gained further skills that will enable additional rapid Proof of Concepts in the future."

The project was in essence looking at the mechanics of a digital currency, where participants join a network in which an online currency can be minted, put into circulation, exchanged, or withdrawn instantaneously.

The move comes as financial institutions have intensified their fintech efforts in response to technology developments, regulatory requirements, and a new breed of agile challenger banks.

The BoE has also recently launched a fintech accelerator that aims to work in partnership with fintech firms on challenges that the central bank faces.

Accelerator participants would engage in short PoC projects, following on work the Bank has done in the areas of data anonymisation, cyber security, and distributed ledger technology.

The Bank said: "Other areas of potential future interest for the accelerator include finding new ways to structure and analyse large datasets, machine learning, particularly in relation to anomaly detection and pattern recognition, and protection of the Bank’s sensitive data